Marissa Mayer, Yahoo!, and the Google effect

Mayer goes Yahoo!

While many would be exceedingly happy with the position she held at Google, Mayer was ready for change. As Yahoo! floundered, and removed their CEO from power, Mayer became the perfect choice to lead them. Some were taken by surprise with the move, but they shouldn’t have been. Well known, well liked, and well versed in the industry, Mayer has all the proper tools to lead.

Those changes are similar to Google’s own structure. The environment at Google is collegial, and welcoming. The focus on mobile is clear, and the hiring practises thorough. The question is whether Mayer is trying to beat Google at being, well, Google.

Acquired target

Mayer spent a lot of time at the Google dojo, seeing first hand that smart acquisitions pay off. Even with a $1.1 billion price tag for the blogging site Tumblr, that move is a smart one. The demographic is young, and it’s a brand new stream for ad revenue. Tumblr is many things to many people, but also highly social. As Mayer was privy to the genesis (and genius) of the Google+ social layer, and the perils of doing it wrong (Orkut), she undoubtedly sees the upside for Tumblr as it relates to Yahoo!’s bottom line and overall scheme.

News that Yahoo may be interested in Acquiring Hulu also lines them up against Google, this time with the YouTube juggernaut. While Hulu has a trump card with their programmed content, YouTube is a big target that is not easily hit. With so much user generated content being uploaded daily, YouTube simply can’t be toppled. They can, however, be edged out of certain areas they’ve not explored.

As the television industry changes, Hulu is in a good position to capitalize on a new type of subscription model. Having already been established as a pay-for-content service, the brand can withstand such a transformation to a channel subscription model. YouTube may not be so lucky, even though they’re currently dabbling in that realm. Pricing and positioning will ultimately win, and Hulu is currently in a much better position.

Smart buys?

Mayer made one very slight snafu in obtaining Tumblr: she promised a positive gain, almost immediately. Promising investors that Tumblr will contribute positively to the bottom line right away is bold, and perhaps misguided. Yahoo! should be focussing their energy on making Tumblr a destination, not expecting it to reap dividends for them straight away. It also sets a precedent that a Hulu acquisition would need to mimic, and that’s a tall order.

One thing Mayer hasn’t picked up on is Page’s willingness to lose. Google acquisitions have a very visceral tinge to them, and almost all are done so with the understanding that what they do will be cobbled into a Google service. That growth model almost never shows immediate gain, and Page is okay to lose for a little while in the interim. The greater overall health of Google Is much more important than turning an immediate profit.

Winners without losers

A thread of desperation still runs deep at Yahoo!. While Tumblr is a good buy, it’s nowhere near as through or well received as Facebook or Google+. What Yahoo! really bought was users, and the roots they’ve put down at Tumblr. The revamped Flickr, and staggering terabyte of free storage space, will attract many to the site. Hulu would be similarly attractive: loyal users, and a new audience for ads.

Modelling Yahoo! after Google is wise. Mayer is taking what she learned from an exceedingly successful startup, and applying it to a company that needs to act like one. Whether or not Yahoo! employees subscribe to her “no working from home” policy, it means culture. The new-look Tumblr is really nice, and translates well to mobile. These are topics Mayer is comfortable and well versed in, and she learned from the best.

The issue may end up Mayer herself. She’s a climber, dead set on winning. Her attitude and drive got her where she is, but tempering it would be wise. Yahoo! can’t out-Google Google, no matter how much they may want to. So long as Mayer understands that she isn’t bigger than Google this time around, things will be just fine.